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From Disruption to Innovation to Creation

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When we think of a disruption, we generally think of a disturbance that interrupts. In business theory, a disruptive innovation is one that creates a new market, shaking up the existing market, and displacing it.25 Disruptive innovation is a powerful way to think about innovation-driven growth. Disruption shifts profitability from one prevailing business model to another. The new model typically provides customers with the same or better value at a much lower cost.26 The fallout: Companies that relied upon the old business model lose ground or are pushed out of business. Netflix is an example of digital disruption, as are Uber, Amazon, Airbnb, and countless other digital services that changed prior business models.

The word “disruption” was popularized by Clayton Christensen in 1997 in his book The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail.27 However, the economist Joseph Schumpeter had introduced the concept of “creative destruction” and the disruptive power of innovation more than 50 years earlier. Schumpeter's thesis was that innovation is responsible for both the progress and the instabilities of capitalism. He attributed those instabilities to the principle of creative destruction, which recognizes that innovation by entrepreneurs is the disruptive force that drives and sustains economic growth. The earlier products and processes are suddenly obsolete, forcing companies to quickly adapt to a new environment or fail.28

Schumpeter's theories powerfully anticipated the future of work. He often used the example of the railroad as a transforming agent in the economy that opened up new opportunities while clearing out old approaches. He pointed to the ability of entrepreneurs, by advancing new products and services, to provide “a perennial gale of creative destruction.”29 Fascinated by the entrepreneurial spirit, he recognized destruction as a mechanism for progress. Schumpeter realized that economic innovation is fueled by entrepreneurs who discover better ways of doing things (the creative part), and their success leads to the collapse of old companies and methods (the destructive part). Automobiles replaced horse-drawn buggies; word processors supplanted typewriters; Internet advertising overpowered print ads.

The rise of the Internet and mobile computing are fundamental disruptors—world-changing events that have altered everything that followed. The 2020 coronavirus pandemic may be a similar event, presenting both an immediate crisis and long-term opportunity. Things may never be the same. New technologies and crises can lead to new modes of collaboration and new institutional relationships; they can be accelerators to the future.

While portions of many jobs will change, and some jobs will likely be eliminated entirely, many more jobs will evolve.

Work Disrupted

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